E4263 v1 Environment and Social Management Framework Lesotho Second Private Sector Competitiveness and Economic Diversification Project (PSCEDPII) Horticulture Page 1 of 43 Executive Summary This Environmental and Social Management Framework (ESMF) provides an overview of potential socio-economic and environmental impacts in the horticulture component of Lesotho Second Private Sector Competitiveness and Economic Diversification Project (PSCEDPII). This ESMF is written to comply with Lesotho legal framework and the World Bank policies, specifically Environmental Assessment (OP 4.01) and Pest Management (OP 4.09). The ESMF includes a matrix to manage potential impacts and a screening tool to assess prospective sub-projects, review, approve and implement future sub-project along with activities and distribution of responsibilities to comply with Lesotho and World Bank policies. The key components of the ESMF are: i) training to ensure environmentally and socially sound orchard management, especially when agro-chemicals are used; ii) effective monitoring of project components through the engagement of a horticulture manager and GLOBAL G.A.P.; and iii) community engagement and communication to manage expectations and distribution of benefits. Page 2 of 43 EXECUTIVE SUMMARY ..................................................................................................................................... 2 ABBREVIATIONS ................................................................................................................................................ 4 1. CONTEXT ....................................................................................................................................................... 5 2. PURPOSE OF THE ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK .............................. 5 3. PSCEDPII OBJECTIVES............................................................................................................................... 6 4. PSCEDPII DESCRIPTION............................................................................................................................ 6 5. SOCIO-ECONOMIC AND BIOPHYSICAL SETTING FOR PROJECT ACTIVITIES ...................................... 10 5.1 Socio-economic Conditions................................................................................................................ 10 5.2 Biophysical Setting ................................................................................................................................ 12 6. ANTICIPATED ENVIRONMENTAL AND SOCIAL IMPACTS ..................................................................... 13 7. LESOTHO POLICIES, LEGAL AND ADMINISTRATIVE FRAMEWORK.................................................... 15 7.1 Agriculture ................................................................................................................................................ 15 7.2 Environment............................................................................................................................................. 15 7.3 Land ............................................................................................................................................................. 15 7.4 Water ........................................................................................................................................................... 16 7.5 Agro-chemicals ....................................................................................................................................... 16 7.6 Labour ......................................................................................................................................................... 16 7.7 HIV/AIDS ................................................................................................................................................... 16 7.8 Patent Law ................................................................................................................................................ 16 7.9 International Conventions and Treaties Signed by Lesotho .............................................. 17 7.10 Administrative Framework ............................................................................................................ 17 8. WORLD BANK SAFEGUARD POLICIES .................................................................................................... 18 8.1 Environmental Assessment (OP/BP 4.01) .................................................................................. 18 8.2 Natural Habitats (OP/BP 4.04) ....................................................................................................... 18 8.3 Pest Management (OP/BP 4.09) ..................................................................................................... 19 8.4 Indigenous Peoples (OP/BP 4.10) .................................................................................................. 19 8.5 Physical Cultural Resources (OP/BP 4.11)................................................................................. 19 8.6 Involuntary Resettlement (OP/BP 4.12) ..................................................................................... 20 8.7 Other Operational Guidelines........................................................................................................... 20 9. ENVIRONMENTAL AND SOCIAL SCREENING .......................................................................................... 20 10. PEST MANAGEMENT .............................................................................................................................. 21 11. ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK ........................................................ 23 11.1 PMU Responsibilities.......................................................................................................................... 25 11.2 Orchard Owners Responsibilities ................................................................................................. 25 11.3 Horticulture Manager’s Responsibilities .................................................................................. 26 11.4 GLOBAL G.A.P. Responsibilities ..................................................................................................... 26 11.5 GoL Responsibilities ........................................................................................................................... 27 11.2 Training and Development ............................................................................................................. 27 11.2.1 Training of Orchard Owners and Workers ................................................................................................ 28 11.2.2 Community Training and Consultation....................................................................................................... 28 APPENDIX 1: ENVIRONMENTAL AND SOCIAL SCREENING FORM FOR SUB-PROJECTS ....................... 29 APPENDIX 2: ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK ....................................... 31 APPENDIX 3: HORTICULTURE MANAGER’S MONTHLY REPORTING FRAMEWORK ............................ 37 APPENDIX 4: AGRO-CHEMICALS EXPECTED IN PROJECT ........................................................................ 39 APPENDIX 5: AGRO-CHEMICALS BANNED IN LESOTHO .......................................................................... 40 APPENDIX 6: STAKEHOLDER CONSULTATION AND CONTRIBUTION FOR ESMF ................................ 41 APPENDIX 7: LESOTHO MAP ....................................................................................................................... 43 TABLE 1: INDIVIDUAL FARMERS WHO PILOTED HORTICULTURE IN PSCEDP ............................................................ 7 TABLE 2: EXPECTED PSCEDPII ACTIVITIES ................................................................................................................ 10 TABLE 3: RELEVANT TREATIES OF CONVENTIONS SIGNED BY LESOTHO ................................................................. 17 TABLE 4: SUMMARY OF WORLD BANK SAFEGUARDS TRIGGERED BY HORTICULTURE COMPONENT ................. 20 TABLE 5: EXAMPLES OF ADVERSE IMPACT IN SUB-PROJECT AREAS ........................................................................ 21 TABLE 6: SCREENING OF SUBPROJECT INCLUSION ....................................................................................................... 30 Page 3 of 43 Abbreviations ARC Agricultural Resource Centres CO2 Carbon dioxide DAO District Agriculture Officer EA Environmental Assessment EIA Environmental Impact Assessment EMP Environmental Management Plan ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan GoL Government of Lesotho GDP Gross Domestic Product LDC Least Developed Country LNDC Lesotho National Development Corporation LSL Lesotho Loti MAFS Ministry of Agriculture and Food Security MFLR Ministry of Forestry and Land Reclamation MTEC Ministry of Tourism, Environment and Culture MTICM Ministry of Trade and Industry, Cooperatives and Marketing NES National Environmental Secretariat PDO Project Development Objective PSCEDPII Lesotho Second Private Sector Competitiveness and Economic Diversification Project PSCEDP Private Sector Competitiveness Project SESA Strategic Environmental and Social Assessment SME Small and Medium Enterprises TRIPS The Agreement on Trade Related Aspects of Intellectual Property Rights UES Unified Extension System WTO World Trade Organisation LSL1=US$0.10 US$1=LSL9.9 Page 4 of 43 1. Context Lesotho is a landlocked mountain kingdom with 2.2 million inhabitants. Fully surrounded by South Africa, its economy is heavily dependent on the larger neighbour; water export alone, from the Lesotho Highlands Water Project, accounts for 23 percent of GDP. 1 Lesotho largely exports unprocessed products; products that could be processed or produced in Lesotho are imported from South Africa. Historically, remittances from Lesotho miners working in South African mines were a significant source of income, but have declined steadily in real numbers and as a percentage of the economy, from close to 50 percent of GDP in the 1980s to under 20 percent at present.2 In the past decade manufacturing as percent of GDP declined from 20 percent in 2004 to 11 percent in 2010.3 Unemployment, as percent of the labour force, is 25.3 percent, 28 percent for females.4 In 2011, 72.5 percent of the population lived in rural areas, the vast majority engaged in agriculture, working the roughly 10 percent of the Lesotho’s land that is arable. Agricultural production is traditional, reliant on rain and with few inputs. Farming is largely subsistence based, from small plots and poor soils that produce low yields and face significant risks due to weather conditions. Historically, Lesotho exported cereals, but in the past three decades, the country became an increasingly larger net food importer. Given the economic challenges and the need to boost employment, the Government of Lesotho (GoL) is seeking to reduce private sector bottlenecks and promote Lesotho’s comparative advantages by providing support to key sectors, including commercial fruit production. Under the Lesotho Second Private Sector Competitiveness and Economic Diversification Project (PSCEDPII), the World Bank is supporting the GoL to enhance commercial horticulture development. 2. Purpose of the Environmental and Social Management Framework This report provides the Environmental and Social Management Framework (ESMF) for horticulture activities under PSCEDPII. The ESMF is required under the World Bank Operational Policy 4.01 for projects that support a number of unknown sub-projects or components or when project components are spread over a larger geographical area. The ESMF sets out the basic principles to screen subproject activities and processes to avoid, minimize or mitigate potentially adverse environmental or social impacts. The ESMF specifically provides: • An overview of relevant socio-economic issues and biophysical setting of activities; • Review of potential socio-economic and environmental impacts; • Applicable legal framework for Lesotho and the World Bank; • Screening tool to assess prospective sub-projects, review, approve and implement future sub-projects; • ESMF tasks and responsibilities; • Budget estimates for ESMF activities. 1 World Bank: Project Appraisal Document for Private Sector Competitiveness and Economic Diversification Project, 2007. 2 Lesotho Government Online: http://www.gov.ls/about/default.php. 3 World Bank: Lesotho Overview. 4 World Bank: databank (2008 numbers). Page 5 of 43 The ESMF was prepared in accordance with applicable World Bank safeguard policies and Lesotho environmental legislation. The preparation included the following activities: • Data gathering; • Literature and legislative review; • Field visits to existing fruit orchards piloting commercial production; • Consultation with key stakeholders, including government agencies and farmers involved in fruit orchards (list of persons met is in Appendix 6); • Assessment of potential social and environmental impacts; • Identification of impact mitigating measures; • Preparation of sub-project guidelines. 3. PSCEDPII Objectives The development objective of the proposed project is to contribute to increased private sector investments, firm growth and jobs created in non- traditional sectors. This will be achieved by (i) improving business environment; (ii) increasing access to finance; (iii) supporting investment promotion in new sectors with increased backward linkages to the local economy and (iv) targeted support to new growth sectors such as horticulture and tourism all of which will benefit both micro entrepreneurs and Small and Medium Enterprises (SMEs). This Environmental and Social Management Framework (ESMF) covers the subproject on horticulture. The subcomponent provides assistance to scale up of fruit production and will support associated processing in the medium term. The scale up will focus on smallholder associations, with the potential for larger scale commercialization through private sector participation. The procedures established under the ESMF can be continued by GoL agencies as commercialization takes off. The project will help support the expansion of upstream activities, including seedling nursery development, expansion of commercial production of deciduous fruits (35 hectares), and strengthen capacity of local on-farm technical support services; and downstream activities beginning in 2016 when the project anticipates increasing volume of marketable crop entering the market from existing and new farms. Of the marketable products, Grade 1 products will be targeted for export markets, Grade 2 products for domestic markets, and Grade 3 and lower for local value added processing. In this regard, downstream activities will focus on the development of local supply and value chains for deciduous fruit, farm certification (GLOBAL G.A.P) which will enable Basotho farmers the opportunity to export Grade 1 products to any market in the world and expand marketing options for local products both within and outside Lesotho. 4. PSCEDPII Description Lesotho is currently a net importer of fruit and there are significant prospects for a scale up of Private Sector Competitiveness and Economic Diversification Project (PSCEDP) activities.5 The microclimate growing conditions enables ideal production conditions of 5 PSCEDP was a World Bank supported pilot of horticulture production in Lesotho that supported fruit orchard establishment between 2007 and 2013. World Bank: Project Appraisal Document, Private Sector Competitiveness and Economic Diversification Project (2007). Page 6 of 43 high value horticulture and an early season harvest compared with neighbouring South Africa. Competitive wages and proximity to potential markets ensures a premium on crop prices. PSCEDPII specifically focuses on the scale up of fruit orchard production in Lesotho to help tap into high value niche markets. The demand for fruits deemed suitable for Lesotho’s climate is expect to grow 12-24 percent annually.6 The support for horticulture is crucial as farmers have been unable to shift to higher value crops due to associated risks and lack of development of market linkages.7 When the PSCEDP support was introduced there was no commercial production of tree crops in Lesotho. The farmers initially participating in PSCEDP (see table 1) charted the way for larger scale commercial fruit orchards and piloted a variety of trees. The farmers are on track to receive GLOBAL G.A.P certification that will allow for international export, likely through partnership with an experienced South African marketing and distribution company to be recruited competitively. Towards the end of PSCEDP a multi-farmer association was established on 10 hectares of joint land in Mahobong with a first expected commercial harvest in 2016. Table 1: Individual farmers who piloted horticulture in PSCEDP Orchard location Mahobong Thuathe Qoqolosing Orchard owner Mr. Kekeletso Phothane Mr. Blessing Nkhasi Mr. Phihlela Motebang Number of trees 1,990 1,051 958 Orchard size 2.3 ha 1.2 ha 0.74 ha Source: Global Development Solutions analysis of data provided by PSC Technical Consultants. The horticulture component of PSCEDPII seeks to improve quality, volume and delivery capability of Basotho farmers by transitioning away from traditional smallholder farming into group or block farming methods similar to those employed in Mahobong. The move from supporting small-scale growers producing fruit on 1-2 hectares (under PSCEDP) to technical support for larger farmer’s associations allows the project to satisfy purchaser’s interest in reliable production chains that can supply volume and quality. Through PSCEDPII, one (1) farmers association with approximately 35 hectares8 in an area with ideal growing conditions will be identified and receive technical assistance. The land contributed by each farmer towards the association plot must be adjacent. The participating farmers must commit to five-year participation in the program to be eligible. The aim is to identify a suitable group of farmers by the end of 2013 in order to plant trees in 2014. The condition for participating farmers is that there are clear long-term leases of land (whether through traditional or formal arrangements). The farmers will either establish the partnership as a formal company or in a producers association with clear benefit sharing arrangements and conditions. The associations will use tree varieties that have shown to perform well in Lesotho under PSCEDPI. PSCEDPII support will focus on development of local supply and value chains for deciduous fruit, orchard certification (GLOBAL G.A.P.) that will enable Basotho farmers to export Grade 1 products to any 6 World Bank: Project Appraisal Document, Private Sector Competitiveness and Economic Diversification Project (2007). 7 World Bank: Lesotho - Sharing Growth by Reducing Inequality and Vulnerability: Choices for Change. A Poverty, Gender and Social Assessment (2010). 8 35 hectares is a size sufficient to warrant an investment in a pack house operation. Page 7 of 43 market in the world, expand marketing options for local products both within and outside Lesotho.9 PSCEDPII will provide funding to enable transition from cereal production to fruit orchards, which will likely include subsidies to compensation for the investment costs and income lost due to transition. Calculated based on prior production, the livelihood stipend is provided on a monthly basis to participating farmers. Participating farmers will provide the labour inputs needed and are expected to pay the workers through the proceeds of the project funds. The social and labour standards practiced in the project areas are expected to spill into the rest of the country. In the medium term, other small-scale farmers or investors may establish additional orchards as the barriers for production are expected to decrease with better market linkages through the existing production. This will require development of a local tree nursery to supply existing, expected future farmer association and private investors. The development of a nursery farm is essential as the desired fruit tree varieties are imported and often not available. Grade 1 fruit crops will primarily go towards export; Grade 2 products can be sold in the local markets, replacing current imports from South Africa. Grade 3 and lower products would ideally be absorbed through value added production. With large quantities of fruits expected from the Mahobong farmer’s association in the 2016 growing season,10 PSCEDPII hopes to entice private investment towards activities that could include canning, juicing and drying or development of support industries producing packaging materials or other materials.11 Investors, who have interest in expanding into value added production, will have sufficient fruit production with which to base their investment thus further increasing employment and technology transfers to Lesotho. As the volume of crops increase into 2020, it is anticipate that private investment flows will respond to opportunities expected to evolve in the food-processing sector.12 It is not anticipated that the project will allocate project funds towards goods and works to provide direct support toward downstream activity. Specifically, the focus of the horticulture component will shift more towards technical assistance for supply chain management, investment promotion and knowledge-based support to facilitate the development of a competitive private sector. The direct PSCEDPII beneficiaries are small-scale farmers with access to land in a suitable microclimate, soil conditions and access to water who are selected to participate in the project either through the establishment of an association or through the establishment of nurseries on their land. These small-scale farmers will benefit from a range of incentives and technical support to convert their land to fruit orchards, with an expected per hectare revenue of approximately US$8,500 annually after the third season growing to US$30,500 in the fifth season. A half-acre nursery producing 40,000 seedlings per season can generate up to US$54,600 annually. The comparison income is US$220 from one hectare of maize.13 Local community members will benefit directly from employment and indirectly through increased economic activity in the otherwise 9 Global Development Solutions: Tree Crop Production in Lesotho: Business Plan for the Pilot Farms. 10 The investment would absorb the expected high volume of grade 3 and lower products that are likely due to lack of experience in the post-harvest handling for the first harvest. 11 As the food processing industry begins to develop in Lesotho, this is expected to trigger demand for packaging material. In this regards, Lesotho can expect to see increased flow of investments in a range of support industries, including packaging. Global Development Solutions: Tree Crop Production in Lesotho: Business Plan for the Pilot Farms. 12 Global Development Solutions: Tree Crop Production in Lesotho: Business Plan for the Pilot Farms. 13 Global Development Solutions: Tree Crop Production in Lesotho: Business Plan for the Pilot Farms. Page 8 of 43 depressed rural economy. With an expected size of 30 hectares, the future farmers association will create approximately 200 seasonal jobs at minimum wage (currently LSL53/day). The Business Plan for horticulture development under PSCEDPII sets out to contribute to national objectives by: Transforming Lesotho into major producer and exporter of early variety tree crops by demonstrating that commercial deciduous fruit production is competitive and sustainable; Improving livelihoods and food security of rural farmers through the production, export and processing of high value tree crops; Reducing farmers’ reliance on maize as a major source of income and food security; Developing a competitive value chain for tree crops including: o Sales of fresh produce in local and export markets; o Juicing, canning and drying facilities for products of Grade 3 and lower quality; and o Food processing industry based on derivatives from tree crops. Expanding production of tree crops in Lesotho as a way of engaging rural farmers in green economic growth through natural resource management, soil and water conservation activities, including reduction in greenhouse gas emissions. Expected results include: Increased export of fruit and substantial reduction in fruit imports; GLOBAL G.A.P. certification of participating farms which enables international export; Network of nurseries for tree seedlings throughout Lesotho to meet local needs; Commercial investments in fruit production, including investments in value added production; Reduced reliance on maize production; Improved livelihoods amongst poor farmers. The fruit orchard developments also provides for broader green economic development and improved natural resources management. The project introduces soil and water conservation, and reduces greenhouse emissions through carbon dioxide (CO2) fixation. One hectare apple orchard can fix up to 45 tons CO2, while at the same time release 34 tons of oxygen and have the benefit of cooling capacity equivalent to 11 billion BTUs. The expected 30-35 hectare orchard has the potential of fixing 1,350 tons of CO2 while releasing 1,013 tons of oxygen and 338 billion BTUs of cooling benefits. This opens the potential to collateralize development loans by trading carbon credits.14 14 Global Development Solutions: Tree Crop Production in Lesotho: Business Plan for the Pilot Farms. Page 9 of 43 Table 2: Expected PSCEDPII Activities Phase 1: Support for farmers association Main activity Associated activities Establish farmer Identification of potential locations (soil, climate and access to water – association, with app. 35 expected in Maseru, Botha-Bothe, Leribe, Berea and Mafeteng districts) hectares of joint land Identification of potential participants Establish land ownership Develop association rules, including obligations, responsibilities and benefit sharing Establish association as legal entity Technical support for On farm training on existing fruit orchards horticulture development Training in: Soil and water conservation Planting Irrigation Pests and pesticide handling Fertilizer application Orchard management (GLOBAL G.A.P. and blue book management) Weather related prevention (netting, live wind screen) Other prevention (fencing, storage, guarding) Pruning On-going support to strengthen association, enable dispute resolution Increased capacity of public extension agents to provide advice on technologies relevant for smallholders Financial support towards Offset lost income in the first three years of lost income Support towards initial labour cost Purchase of trees, pesticides, fertilizer and other input Initial Global Gap certification 5. Socio-economic and Biophysical Setting for Project Activities This section provides an overview of environmental and socio-economic conditions relevant to the project area, not a complete environmental or social baseline of Lesotho.15 Qualitative research suggests close relations between the environmental conditions and socio-economic opportunities in Lesotho. The research shows local causes of income insecurity in agricultural production as a main source of poverty.16 Soil erosion, lack of productive land or labour, lack of adequate farming inputs and weather impact (drought and harsh weather conditions) were main causes. The decline of the natural resource base could result in increased vulnerability and exclusion of rural population. 5.1 Socio-economic Conditions Lesotho’s GDP growth ranged from 4.7 to 6.8 percent in the last three years, but economic growth has historically had little distributional effect. With a Gini of 0.66 Lesotho incomes are highly unequal, restricting developmental opportunities.17 15 Unless otherwise source, the data in this section originates from Environmental Evaluations of a Horticulture Demonstration Farm in Lesotho and Lesotho - Sharing Growth by Reducing Inequality and Vulnerability: Choices for Change. A Poverty, Gender and Social Assessment. 16 World Bank: Lesotho - Sharing Growth by Reducing Inequality and Vulnerability: Choices for Change. A Poverty, Gender and Social Assessment (2010). 17 World Bank: Lesotho Country Brief. Page 10 of 43 Economic development is challenged by the high rate of chronic poverty and unemployment. The latest available data shows that 43 percent of the population live on less than US$1.25/day and 62 percent less than US$2/day. People in rural areas have lower incomes and higher incidence of poverty: 60 percent fall below the national poverty line of US$1/day.18 The depth and severity of poverty is significantly higher in the mountainous rural districts. 19 Poverty levels significantly impact educational opportunities. Unemployment, as percent of the labour force, is 25.3 percent, 28 percent for females.20 In 2011, 72.5 percent of the population resided in rural areas, the vast majority of whom engaged in agricultural production. As a percentage of GDP, agricultural activities have declined steadily to a 7.76 percent share in 2011. Farmers engage primarily in traditional subsistence production with few external inputs or market opportunities. Farms are often located in remote villages far from infrastructure. The average land cultivated per farmer is 1.3 hectare – only 11 percent cultivate over 3 hectares. However, GoL subsidies have traditionally favoured farmers owning more than 15 hectares. Most of the crops and livestock are consumed locally and little is sold to outside markets. Maize, wheat and sorghum are main crops, but only five percent of farmers sell any surplus maize and only 0.2 percent sells all of their production. 50 percent of rural dwellers record farming as the main source of income and there are few opportunities for off-farm income outside informal spin offs such as traditional beer- brewing or fuel wood sale. As a result, Lesotho is a net food importer and rural households are typically unable to meet their basic needs and often rely on food donations. Rural households traditionally relied on remittances as a way to build resilience, but the main source of remittances, through male labour in South African mines, has steadily declined leaving few alternatives for off-farm incomes. World Bank data suggests 58 percent of children aged 7-14, engage in agricultural related work and that poor nutrition stunts growth for 39 percent of all children (35/43 percent for females/males respectively).21 Gender inequality is entrenched in Lesotho and reflected in the (limited) available data. Until 2006, women were considered minors under both traditional and formal law. The Basotho culture prescribes the traditionally accepted roles for women and men – for example, Basotho women are expected to grow food, collect water and fire wood. Women could not own or inherit property, enter contracts, make formal complaints, be party to lawsuits or get their own passports. This changed through the passage of the Legal Capacity of Married Persons Act, which repealed discriminatory provisions in formal law. Still, the co-existence with customary law provides inconsistences in the application and the inheritance rules favour men(for example, the Act recognizes women’s right to land, while customary law still denies this right). However, females head 36 percent of all households and in practice have access to land on an equal basis as men; access to land typically gained through marriage. Women carry the responsibility for food security and subsistence agricultural production. Women and men engage equally work in agricultural production, but men are more 18 World Bank: databank (2003 numbers). 19 May et. al.: Poverty and Inequality in Lesotho. 20 World Bank: databank (2008 numbers). 21 World Bank: databank (2009 numbers). Page 11 of 43 likely to have outside incomes; families who diversity their activities have higher incomes while female-headed households in rural areas are more likely to be to be poor. Lesotho has one of the highest HIV/AIDS prevalence in the world; in 2011 World Bank data suggests that one in four adults carry HIV.22 HIV for the population aged 14-25 is almost three times higher for women; overall 26 percent of all females and 19 percent of all males are HIV carriers. The HIV epidemic in Lesotho has a devastating impact on rural households, leading to loss of productive capacity, marriage breakdown, and increased numbers of widows and widowers. 5.2 Biophysical Setting Arable land as a percentage of Lesotho’s total land area has been consistent since 1970 at approximately 10 percent, albeit with a small contraction.23Farming in Lesotho is tested by depleted soil, lack of irrigation, limited use of fertilizers, weak extension systems, inferior infrastructure, under-development markets, lack of land tenure security and lack of credit availability. Cereal production takes place on approximately 157,000 hectares, about half of arable land, but yields have been subject to significant swings over the past decade, both in terms of total production and average yields per hectare. Lesotho’s ecosystem is fragile and significantly influenced by climatic changes and weather related shocks, including heavy winds, snowfall, frost and hailstorms. For example, severe weather between December 2010 and February 2011, with accumulative rainfall higher than ever recorded, strong winds and hailstorms resulted in flooding, rockslides and severe run off. The total damage was estimated at US$66.1 million – 3.2 percent of the GDP.24Droughts are common, occurring in three out of ten years and the annual rainfall is highly variable, with the bulk of rainfall falling between October and April. Devastating droughts have been extensive over the past two decades occurring in the periods of 1983-84, 1991-93, 1994-96 and 2002-04. Agricultural practices, including extensive animal grazing contributes to the degradation of land. Degradation of land happens in a two-stage process: first organic matter rich surface is removed which leads to diminished nutrient and water retaining capabilities; second, deeper erosion. Erosion is significant across Lesotho; water storage capacity of the soil has become an increasing limiting factor to shallow soil depths. Erosion is estimated to cause the loss of 40 million tons every year. Lesotho soils are generally classified as oxisols, characterized by soil erosion, low pH, and extreme deficiency of phosphorus, physical problems such as difficult land topography, and the impacts of the environmentally degrading soil degradation. Oxisols are very highly weathered soils that are found primarily in the inter-tropical regions of the world. These soils contain few weatherable minerals and are often rich in iron and aluminium oxide minerals. Most of these soils are characterized by extremely low native fertility, resulting from very low nutrient reserves, and high phosphorus retention by oxide minerals. Most nutrients in oxisol ecosystems are contained in the standing vegetation and decomposing plant material. Land belongs to the nation, and is administered by the state or chiefs on behalf of people. There is thus no individual ownership of land or owners’ titles– land is allotted 22 World Bank: databank. 23 World Bank: databank. 24 World Bank: Lesotho Overview. Page 12 of 43 through leasehold or allocation. While there are formal measures in place to register land leases, rural lands under agricultural production is managed under customary tenure systems with a central role for chiefs in land management and allocation. Lesotho’s forest coverage is fragmented; the climate and high elevation does not favour tree growth. The forest coverage is fragmented; forest coverage is challenged by local needs for cooking fuels. Forest coverage is an estimated 442 square km. The rural use of fuel wood for cooking and heating puts significant pressure on the existing coverage. The areas of Lesotho ideally suited for horticulture production forms part of the northern foothills, which higher fertility of soils and better agricultural productivity. The foothills have higher rainfall than the lowlands and better access to water sources. There are modest areas with of plantation forests, mostly with eucalyptus and pines, but small patches of afromontane forest. However, land is mostly cleared for agricultural use. While the area offers better farming conditions, it is challenged by the same problems all Basotho farmers face in terms of degradation of soils. Maize production is the dominant crop, but yields are low and declining. While growing conditions are better, erosion is a concern as it is elsewhere and gullies are spread across the landscape. Water is relatively abundant in Lesotho, but in rural areas access is constrained by the livelihood context. The water availability provides a potential for Lesotho, but the ability to exploit the resources are modest due to topography and soil distribution relative to the position of suitable rivers. Available data provides little information on irrigation, use of fertilizers or pesticides, but qualitative evidence suggests that the use of such farming inputs are very low. Both pesticides and fertilizers are imported, and in 2004, the total value of fertilizer import as LSL9,204, while imports of organic chemicals and pesticides was LSL36,462.25 6. Anticipated Environmental and Social Impacts Despite low fertility, oxisols can be quite productive with inputs of lime and fertilizers. Micro-irrigation and water conservation techniques on smaller scale offer good potentials. Horticulture activities also provide potentials to prevent the decline of soil productivity and erosion. Given the small scale of the project, the impacts are expected to be limited and mainly positive. However, as the project changes the community dynamics for the establishment of a project orchard, and introduces pesticides, fertilizers and irrigation, the framework tracks potential impacts and management to ensure distribution benefits and protection of environment. Since it is expected that the project will chart the road for a more substantial scale up of horticulture production in Lesotho, the ESMF is designed for GoL to use post PSCEDPII. PSCEDPII horticulture support expected impacts include: Employment and poverty reduction: o Increased monetary incomes for members of the farmers association; o Supplementary incomes for workers employed by the association; o Related government incomes from activities: taxes and transfers; o Increased food security and nutrition. 25 Kingdom of Lesotho: National Profile of Chemicals Management Infrastructure 2010. Page 13 of 43 Agricultural development and skills: o Empowerment of farmers; o Skills development on a high value, niche production; o Diversification of agricultural production; o Establishment and strengthening of market linkages; o International certification procedures (GLOBAL G.A.P.) enabling exports. Environment: o Increased environmental awareness through improved production processes, integrated pest management; o Water resource conservation practices; o Improve soul conservation and erosion prevention. As horticulture increases and contributes to rural incomes, the project could have spin off effects on health and education. However, there are potential environmental and social risks associated with the project that requires careful management and training. Environmental risks from use of agro- chemicals are particularly damaging to children and pregnant women, while social cohesion may be uprooted due to changes in production and income distributions. Potential problematic impacts include: Misuse of agro-chemicals and inadequate pest management; Occupational hazards (inadequate washing, drifting of fumes etc.); Water overuse and pollution; Subsidies for initial project participants not leading to additional production due to lack of support or ability to get projects off the ground; Program benefits being captured by larger landholders without any spin off effect on rural economy; Poor control of soil erosion; Project participants centred in areas with better infrastructure leaving marginalized communities, e.g. with lack of road infrastructure unable to benefit from development; Increase in traffic (dust, noise, health/safety); Pressure on land, relative values – non-transparent land takings; Potential influx to community due to economic development Inadequate development of irrigation infrastructure which could lead to alteration of the hydrological regime, for example, small dams development; To ensure strong beneficiary support and management of potential adverse impacts, the ESMF includes monitoring arrangements for the following project activities: Impact of change in production practices and land use management; Environmental impacts from use of fertilizers and pesticides; Resource use and depletion; Access rights by community members; Land tenure; Occupational health and labour conditions; Benefit distribution and developmental impact; A communications and outreach plan that will be budgeted in the project. Page 14 of 43 7. Lesotho Policies, Legal and Administrative Framework 7.1 Agriculture Lesotho does not have legislation specific to agriculture, but the government sees commercial farming as one of the important avenues for increasing agricultural production and household food security. In addition, Lesotho Vision 2020 seeks to promote: Sustainable crop production intensification and diversification; Increased production of fish and fish products from sustainable expansion and intensification of aquaculture; Forests to ensure biodiversity and genetic resources; promote climate change mitigation, adaptation and rehabilitation of degraded lands; Sustainable land management; Access to and sharing of knowledge improve competitiveness, diversify into new enterprises, Increased value and meet market requirements for natural resource management; Rooting out causes of hunger, food insecurity and malnutrition. 7.2 Environment The Environment Act of 2008 provides the framework for protection and management of the environment, and the sustainable utilization of natural resources. The Act establishes environmental units in each ministry to mainstream environmental policies and the National Environmental Council (NEC) and Environmental Coordinating Committee, both of which coordinate environmental issues between ministries. The Act provides guidelines for when Environmental Impact Assessments are needed and what they must address, auditing and monitoring. Specifically, the Act notes that the Director of the ministry must issue guidelines of practices to conserve soil, prohibition of soil degradation practices, and monitor soil degradation. The Act provides the framework for penalties for violations, including activities that pollute water sources. Finally the Act makes provisions for pollution limits and banned substances, including pesticides (banned pesticides, see Appendix 5). 7.3 Land In accordance with the constitution, “all land in Lesotho is vested in the Basotho Nation.�26Under the constitutional provisions the right to allocate, grant, terminate or restrict land is held by the King. Lesotho therefore does not provide for private ownership of land, but right of use. The 2010 Land Act provided a new framework to manage land administration, allocation and expropriation. In addition, the Act created land courts, measures to settle land disputes and established land revenues. In accordance with the Act, foreigners can only hold land in partnership with Lesotho nationals. In urban areas, the Lesotho Land Administration Authority oversees allocation of land, while in rural areas local commissioners manage allocation. However, rural lands are 26 The Constitution of Lesotho. Page 15 of 43 mainly part of the customary systems – land used for agricultural production is allocated by chiefs or through inheritance overseen by the chief’s authority. Allocation through local commissioners happens typically only for formal development of businesses or when a family builds a modern dwelling of significant value. 7.4 Water Ministry of Natural Resources Water and Sanitation Policy (2007) includes the outline for quality, monitoring and quantity. However, it does not consider agricultural uses and nor does it provide environmental standards. 7.5 Agro-chemicals A GoL bill titled Hazardous and Non Hazardous Waste Management was drafted in 2008, but for unknown reasons it was not passed into law, a fate similar to the 1986 bill titled Pesticides Management. The governance of agro-chemicals such as pesticides and fertilizers is fragmented with responsibilities split between a number of different ministries overseeing environment, agriculture, environment and labour. 7.6 Labour The Labour Code provides the national labour, safety and health requirement for the workplace. The Code ensures a regularly adjusted minimum bill, enables oversight of all workplaces to the Labour Commissioner. Under the oversight of the Commissioner, the Code requires employers to keep track of all accidents or dangerous occurrences and notification to the Labour Commissioner. 7.7 HIV/AIDS As a supplement to the Labour Code a special legal notice on HIV/AIDS was published in 2010 to protect against discrimination and provide guidance to employers. The guideline seeks to prevent any form of discrimination in the workplace, but also sets a standard for information and education that must be shared in the workplace. The code obliges employers of any size to provide comprehensive and gender sensitive programmes aimed at prevention and treatment. Employers are for developing a policy which includes the following provisions: education and awareness programme, promotion of safe sex (distribute condoms), facilitation of access to care and prevention of discrimination in the work place. As a supplement to the Labour Code, the Labour Commissioner oversees these requirements. 7.8 Patent Law The business plan for the horticulture component suggests that the establishment of fruit tree nurseries in Lesotho may require royalty payments to patent holders of selected varieties. However, Lesotho's patent system does not extend patent rights to plant varieties, and no such extension is required by any international treaty that Lesotho is a member of. The WTO TRIPS agreement does require most countries to extend sui generis protection to plant varieties, but as a Least Developed Country (LDC) Lesotho is not yet bound by this provision.27 Barring domestic law, there would be no obligation to pay royalties for the use of any plant varieties. The international protection 27LDCs are exempt from such requirements under article 27 of the WTO TRIPS agreement. See http://www.wto.org/english/news_e/news13_e/trip_11jun13_e.htm. Page 16 of 43 regime in Lesotho pertains to industrial property and copyright. Lesotho is partner to the International Treaty on Plant Genetic Resources for Food and Agriculture, which pertains to protection of genetic resources, traditional knowledge and plant variety protection. 7.9 International Conventions and Treaties Signed by Lesotho Lesotho is signatory to a number international conventions and treaties with relevance to the horticulture components of PSCEDPII. The treaty content is largely reflectived in Lesotho’s legal code. However, while Lesotho is signatory to a number of conventions which limits and prohibits movement of hazardous wastes, included agro-chemicals, Lesotho currently does not have any hazardous waste disposal capacity. Table 3: Relevant Treaties of Conventions Signed by Lesotho Name of treaty/convention Year signed Africa Convention on Conservation of Nature and Natural Resources 1968 Vienna Convention for Protection of the Ozone Layer 1994 Montreal Protocol on Substances that Deplete the Ozone Layer 1994 United Nations Framework Convention on Climate Change 1995 Convention on Biological Diversity 1995 United Nations Convention to Combat Desertification in those Countries Experiencing Serious 1996 Drought and/or Desertification, Particularly in Africa Basel convention on Transboundary Movement of Hazardous Wastes and their Disposal 2000 Kyoto Protocol on Climate Change 2000 Cartagena Protocol on Biosafety 2001 Convention on International Trade in Endangered Species of Wild Fauna and Flora 2003 Treaty on Plant Genetic Resources for Food and Agriculture 2006 Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous 2008 Chemicals and Pesticides in International Trade 7.10 Administrative Framework Agricultural support services in Lesotho are provided by a number of Government agencies, including the Ministry of Agriculture and Food Security (MAFS), the Ministry of Forestry and Land Reclamation (MFLR) and the Ministry of Trade and Industry, Cooperatives and Marketing (MTICM). MTICM is expected to initiate the development of a strategy to engage private sector investments in value added facilities and support industries. The Ministry of Tourism, Environment and Culture (MTEC) oversees environmental protection agency, while the National Environmental Secretariat (NES) carries the administrative duties and is the focal point for ministerial coordination of environmental issues. NES is also tasked with ensuring Lesotho’s compliance with international convention and treaties. As fruit production increases, and post PSCEDPII, NES is expected to coordinate and address issues related to horticulture, including on orchard management of agro- chemicals, soil and water management. It will be particularly relevant to coordinate such issues with MFLR, MAFS and MTICM in order to have integrated planning that Page 17 of 43 encourage sound environmental and social management and ensures new market entrants in the sector. The Ministry of Labour and Employment oversees occupational health and pesticide safety issues with regard to the use, storage and handling at workplaces. The Ministry of Natural Resources provides overall protection and management of natural resources, relevant specifically to the ministries oversight of water resources. The Ministry of Forestry and Land Reclamation oversees forestry including fruit tree nurseries, soil and water conservation, in part to address land degradation issues. For the purpose of the PSCEDPII, the World Bank supports a Project Management Unit (PMU) which, given the overarching focus of PSCEDPII, is hosted under MTICM. 8. World Bank Safeguard Policies 8.1 Environmental Assessment (OP/BP 4.01) The objective of OP 4.01 is to ensure that World Bank supported projects are environmental sound and sustainable. The policy is triggered if the project is anticipated to have potentially adverse impacts in its area of influence. Depending on the project, and nature of impacts a range of instruments can be used: Environmental Impact Assessment (EIA), regional or sectoral Environmental Assessment (EA), Strategic Environmental and Social Assessment (SESA), environmental audit, hazard or risk assessment, Environmental Management Plan (EMP) and Environmental and Social Management Framework (ESMF). The PSCEDPII is rated as a category B project and supports a number of unknown sub- projects or components therefore this ESMF is required. 28 Specifically, for the horticulture subcomponent, the specific sites have yet to be selected and this will be done during the first phase of the implementation. Institutional responsibilities are outlined in section 11 and the specific framework to oversee activities is provided in Appendix 2. 8.2 Natural Habitats (OP/BP 4.04) OP 4.04 recognizes that the conservation of natural habitats is essential to safeguard their unique biodiversity and to maintain environmental services and products for human society and for long-term sustainable development. The World Bank supports, and expects borrowers to apply, a precautionary approach to natural resource management to ensure opportunities for environmentally sustainable development. Natural habitats are land and water areas where most of the original native plant and animal species are still present. Natural habitats comprise many types of terrestrial, freshwater, coastal, and marine ecosystems. They include areas lightly modified by human activities, but retaining their ecological functions and most native species. The policy is triggered if the project is expected to cover areas of natural habitat in order to protect, maintain or rehabilitate natural habitats and their functions. 28Category B implies that project impacts are site-specific and easy to manage; few if any of them are irreversible; and in most appropriate cases mitigatory measures can be readily designed. Page 18 of 43 The land that will be included in the project is already converted agricultural lands and the policy is therefore not triggered. 8.3 Pest Management (OP/BP 4.09) The policy is triggered if procurement of pesticides is envisaged (either directly through the project or indirectly through on-lending); if the project may affect pest management in a way that harm could be done, even though the project is not envisaged to procure pesticides. This includes projects that may lead to substantially increased pesticide use and subsequent increase in health and environmental risks; and projects that may maintain or expand present pest management practices that are unsustainable. With respect to the classification of pesticides and their specific formulations, the Bank refers to the World Health Organization’s Recommended Classification of Pesticides by Hazard and Guidelines to Classification (Geneva: WHO 1994-95). The following criteria apply to the selection and use of pesticides in Bank-financed projects: Have negligible adverse human health effects; Be shown to be effective against the target species; Have minimal effect on non-target species and the natural environment. The methods, timing, and frequency of pesticide application are aimed to minimize damage to natural enemies; Use must take into account the need to prevent the development of resistance in pests. At a minimum pesticide use and management should comply with FAO’s Guidelines for Packaging and storage of Pesticides, Guidelines on Good Labelling Practice for Pesticides, and Guidelines for the Disposal of Waste Pesticide Containers on the Farm. Under PSCEDP, GLOBAL G.A.P. oversaw pest management and monitoring protocol. Given the very limited scope of PSCEDP, the project did not trigger OP 4.09. However, with the expansion to 35 hectares under PSCEDPII the policy is triggered. The management principles required are outlined in section 10. 8.4 Indigenous Peoples (OP/BP 4.10) The objective of this policy is to: (i) ensure that the development process fosters full respect for the dignity, human rights, and cultural uniqueness of indigenous peoples; (ii) ensure that adverse effects during the development process are avoided, or if not feasible, ensure that these are minimized, mitigated or compensated; and (iii) ensure that indigenous peoples receive culturally appropriate and gender and inter-gene rationally inclusive social and economic benefits. The indigenous people’s operational policy is triggered if a project affects indigenous peoples, defined as groups of distinct, vulnerable, social and cultural groups. There are no indigenous groups identified in the project area, nor in Lesotho as a whole, wherefore the policy is not triggered. 8.5 Physical Cultural Resources (OP/BP 4.11) Under OP 4.11 World Bank projects must screen land for the existence of physical cultural resources, which can be movable or immovable objects, sites, structures, groups of structures, and natural features and landscapes that have archaeological, Page 19 of 43 paleontological, historical, architectural, religious, aesthetic, or other cultural significance. Physical cultural resources may be located in urban or rural settings, and may be above or below ground, or under water. Their cultural interest may be at the local, provincial or national level, or within the international community. Land involved in the project should be subject to screening, but may not be considered for inclusion in the project if physical cultural resources will be affected. 8.6 Involuntary Resettlement (OP/BP 4.12) The objective of this policy is to (i) avoid or minimize involuntary resettlement where feasible, exploring all viable alternative project designs; (ii) assist displaced persons in improving their former living standards, income earning capacity, and production levels, or at least in restoring them; (iii) encourage community participation in planning and implementing resettlement; and (iv) provide assistance to affected people regardless of the legality of land tenure. This policy is triggered not only if physical relocation occurs, but also by any loss of land resulting in: relocation or loss of shelter, loss of assets or access to assets, loss of income sources or means of livelihood, whether of not the affected people must move to another location. The project will only include existing agricultural lands where there is no loss of land, assets. Fencing established for the orchards will be designed to ensure continued community access to fields and footpaths. 8.7 Other Operational Guidelines Other operational guidelines include: Forests (OP/BP 4.36, triggered if project seeks to harness potential of forests), Safety of Dams (OP/BP 4.37, triggered for new and existing dams to ensure design, construction and safety measures), Projects on International Waterways (OP/BP 7.50, triggered in projects that involve international waterways) and Projects in Disputed Areas (OP/BP 7.60, triggered where disputes exist between neighbouring states). None of these guidelines bear any relevance to expected PSCEDPII activities. Table 4: Summary of World Bank Safeguards Triggered by Horticulture Component Yes No Environmental Assessment (OP/BP 4.01) [X] [] Natural Habitats (OP/BP 4.04) [] [X] Pest Management (OP/BP 4.09) [X] [] Indigenous Peoples (OP/BP 4.10) [] [X] Physical Cultural Resources (OP/BP 4.11) [] [X] Involuntary Resettlement (OP/BP 4.12) [] [X] Forests (OP/BP 4.36) [] [X] Safety of Dams (OP/BP 4.37) [] [X] Projects on International Waterways (OP/BP 7.50) [] [X] Projects in Disputed Areas (OP/BP 7.60) [] [X] 9. Environmental and Social Screening The horticulture activities cover a yet unknown geographic area, and requires careful management of environmental and social impacts. The Environmental and Social Screening Form in Appendix 1 provides the overview of actions to be taken depending on the conditions for the project. However, this does not replace the framework in Page 20 of 43 section 11 or monitoring arrangements to ensure that the project adheres to national legislation and World Bank safeguard policies, provided in section 8. While Lesotho’s policy and legal frameworks, and the World Bank safeguards policies largely overlap in terms of intent, the governments low capacity and lack of experience with horticulturemeans that there is yet little developed capacity in government agencies to provide adequate oversight or support for project activities. The project will build government capacity, but the PMU will ensure screening of sub-projects and maintain files for public view. To ensure capacity building the PMU will partner with government agencies during the screening process to build towards a full hand-off towards the end of the project. The Environmental and Social Screening will be undertaken by qualified reviewers once potential sub-project sites are identified (see Appendix 1 for qualifications of required). The screening includes a short description and screening for any potentially adverse impacts, which may either result in rejection of potential project sites or trigger additional work to develop mitigating strategies for identified adverse impacts. The PMU is required to keep all records of screening material and reports for public view if requested. Table 5: Examples of Adverse Impact in Sub-project Areas Sub-project site: Example of adverse impact Potential mitigation Impact community A number of farmers will have to Consult with community to ensure acceptance footpaths add 15 minutes to walk about the of mitigation, options include: gates or fenced project area to get to their construction of fences that allows access to plots. community to traverse project site Is in an area with There is significant erosion in the Study site to determine whether it is possible erosion and project area or adjacent. Unclear to mitigate and prevent further erosion. significant top-soil how it may affect project site in Ensure that project does not contribute to loss the future. erosion in any way. Is located in a water Water requirement for project Develop additional water sources, engage in stressed community will likely impact water rainwater harvesting, or potentially reject site. availability for adjacent community. 10. Pest Management Horticulture production under PSCEDPII will continue to subscribe to integrated pesticide management principles overseen by GLOBAL G.A.P. While PSCEDPII activities are limited to 35 hectares and thus not a substantial increase in use of pesticides, the potential scale up through private sector participation makes it important to establish sound practices, competence and knowledge. There is a strong potential for GLOBAL G.A.P. procedures to be streamlined into the currently relatively weak GoL regulatory framework. The aim of the project is to introduce horticulture in Lesotho in an environmnetally friendly manner which seeks to buid on natural control mechanisms and judicious use of agro-chemicals in pest control. Orchards will rely, to the extent possible, on non- chemical measures to keep pest population low. The use of agro-chemical, if necessary, should be closely measured to avoid adverse effects. The project will ensure that soil tests and leaf analysis are conducted to safeguard the environmental health. Furthermore, application should be based on soil tests and leaf analysis to determine the levels required. Given the lack of knowledge with horticulture Page 21 of 43 and little use of agro-chemicals in farming currently, a crucial part of the project is to build capacity. This will happen through close collaboration with GoL agencies, but specifically through tranining of project participants (see also section 11.2). Uncontrolled use of agro-chemicals could result in contamination of water resources, affect vegetation, yields, wildlife and community health. Water tests should specifically track nitrogen traces GLOBAL G.A.P. provides guidance to small and large scale farms. For the small scale farms, with less capacity, GLOBAL G.A.P. has developed guidance for farmers with limited literacy and financial means. The GLOBAL G.A.P. program covers all aspects of pest and pesticide management required under the World Bank’s OP 4.09. In accordance with GLOBAL G.A.P. procedures, orchard management will include the following aspects: Preventive measures. The site selection should take into consideration potential pests. Once the orchard is under establishment, farmers should work to increase organic matter content and plan only pest free plants. Effective weed control can help prevent potential tests, and equipment must be disinfected to prevent infection (e.g. pruning saws). Ongoing monitoring. Orchards should ensure daily inspections, learn to identify potention pests and set pheromone traps. All observations should be duly noted to assist subsequent actions. If treatment is necessary. Orchards should set traps and seek to engage natural enemies. If this is ineffective, use of non-chemical products and least toxic products should be prioritized. Weeds should be manually controlled rather than managed through use of agro-chemicals. Once agro-chemicals are applied, orchards must clearly post warning signs to indiate application during the re- entry interval period. The use of signage should be shared with surrounding communities. Lastly, orchard owners/managers much ensure that all application machinery and equipment is in working order, and test equipment annually. Management of pesticides/agro-chemicals. Only products suitable for the target crop may be used. The horticulture manager will assist with suitable products that comply with GLOBAL G.A.P, Lesotho and World Bank OP 4.09 standards. Orchards must ensure that there is adequate protective clothing, incl. masks, boots, gloves (budgetted as part of project funds, LSL160,000/annually). All purchases and use must be tracked. Storage requirements. All agro-chemicals must be stored seperately from other facilities. Liquids and powders should be separated and storage facilities must be protected against theft (guards/locks). If materials are stored in a shed, the shed must be built with adequate ventilation to prevent concentration of fumes. The storage facility must have clear warning signs, and all materials should be stored in clearly labeled, orginal packaging. Orchards must have adequate measuring equiment or scales to ensure correct application. There should be close proximity to washing facilities and tools to clean potential spillage. Orchard owners or managers are responsible for keeping a stock inventory which is updated at least every three months. Training and safety. Everyone working in proximity to agro-chemicals should receive training, not just a few workers who may directly handle pesticides. The Page 22 of 43 PMU should keep track of everyone who have received required training, and issue certificates. Orchard owners must keep track of employee training locally. On each orchard, at least one person, ideally more, should receive training in first aid and orchards should have a first aid kit, which includes equipment to wash eyes. The project budget for training is LSL385,000 per annum. GLOBAL G.A.P. requires adeqate record keeping for orchards to receive certification, which includes detailed recording of use of agro-chemicals, inclduding: location/data, product used, reason for use and quantity used, and person applying the agro-chemical. 11. Environmental and Social Management Framework Under proper project management, potential adverse environmental and social impacts from the project are likely insignificant, while there are strong potential for generation positive impacts. The ESMF provides the management framework for the project, but there is a need for a coherent Lesotho government policy to continue to support fruit orchard development, and ensure strong environmental safeguards in production. Government assistance and oversight is currently weak and fragmented.29 Long term plans should be put in place as part of PSCEDPII to ensure that GLOBAL G.A.P. or similar national standards can be enforced to enable the continued export both from farmers included in activities and farmers who develop fruit orchards as spin offs from the project. A detailed phase out of assistance and project twinning arrangements with relevant government agencies, which may include developing public private partnerships, could be used to establish needed capacity. This could include certification of a Lesotho laboratory to serve the growing needs of commercial horticulture.30 As part of the site selection, soils should be tested to determine suitability, besides identification of ideal climatic zones. For example, phosphorus soil test values between 12-20 ppm are considered adequate for tree fruit establishment and production. Prior to planting, through soil testing, nutrient levels and pH levels should be noted for adequacy. Lime can be added to raise the soil pH levels where it is below 5.5. Since phosphorus, potassium and lime do not move readily through the soil, pre-plant applications are generally the most effective. The same is true of micronutrient boron, needed for health apple and cherry growth. Agrochemicals containing these (and other nutrients) should be effectively worked into the soils. Furthermore, the target pH before establishing a new orchard is 6.5 on sandy soils and 6.0 on clay soils. Use of dolomitic lime (high in magnesium) on soils low in magnesium is recommended. Rates of application vary with soil type and initial pH. Orchards will rely, to the extent possible, on non-chemical measures to keep pest population low. When agro-chemical use is necessary, it should be used in a manner that minimizes adverse effects on beneficial organisms, humans, and the environment. Furthermore, application should be based on soil tests and leaf analysis to determine the levels required. As there is a lack of experience in Lesotho with agro-chemical management, training (see 11.2) is essential. Inadequate use of agro-chemicals could result in contamination of water resources, affect vegetation, yields, wildlife and community health. Water tests should specifically track nitrogen traces. 29 The environmental legislation and implementation in Lesotho is poor and focuses on coercive measures rather than preventive. Lack of qualified staff, resources, monitoring equipment weak administration and organizational structures and institutional conflicts leaves environmental work in Lesotho fragmented. Labour code enforcement is similarly challenged by inadequate human resources. 30 According to the 2010 National Profile of Chemicals Management Infrastructure, Lesotho does not have any accredited laboratories that can perform the analysis needed in the project and all involved ministries have very limited capacity to monitor specific projects. Page 23 of 43 Erosion is a particular concern in Lesotho and should be closely monitored especially during tree establishment. Mitigating measures must be put in place depending on location. Such measures should not only protect against normal precipitation, but be planned for erosion prevention during heavy rainstorms. The volume of water required for the orchard should not pose any impact on surrounding communities unless the community is already water stressed, as water is generally abundant. However, while the orchard will rely on drip-irrigation, pumping or gravity flow infrastructure will likely be developed. The volume and quality of water should be closely monitored. For example, high iron content could lead to leaf damage. Given that the orchard will be located on existing farmland, the expectation is that the orchard development will have no impact on surrounding production, and measures are out in place to ensure that it does not have any impact on surrounding community’s water demand. The ESMF matrix (Appendix 2) provides measures to consider non-point runoff from orchard-applied fertilizers (organic and inorganic) and pesticides, but also water use, soil type, slope, watersheds, and groundwater relate to surface runoff, drainage, and persistence in and leaching through the soil profile. Lesotho institutions lack capacity to effectively monitor environmental impacts and the PMU will therefore be in charge of project monitoring to establish precedence and access to services, such as laboratories. In addition, the horticulture activities should have strong weather protection measures in place, including hail nets and fences to protection from extreme weather that could cause tremendous damage to trees and crops. The PMU oversight is supported by GLOBAL G.A.P., which based on an annual fee, will oversee environmental standards. The interventions by GLOBAL G.A.P. will also ensure that fruit production is compliant with international standards required for export. Participation in Global Gap also ensures proper handling of potential surplus pesticide or fertilizer, as currently Lesotho lacks adequate legislation on hazardous waste. As part of the preparation for the orchard development under PSCEDPII, the prospective participants must ensure clear long term leases or lease arrangements with lease holders. The PMU should assess all leases to ensure that there are no conflicts, including that participating farmers pays a suitable compensation where long terms arrangements with lease holders where this is applicable. The local chiefs are important in that they allocate land and the PMU therefore needs to clear leaseholders with chiefs, while at the same time balance the chiefs potential (financial) interest in the project. The ESMF matrix (Appendix 2) provides a number of measures to monitor and mitigate potential social issues. These include mainstreaming of gender and adherence to labour law. In addition the matrix establishes a few indicators to enable the project to monitor the impact amongst the direct participants and the surrounding community. These include changes in health status, incomes and educational opportunities pursued. An environmental and social review will be conducted midterm of the project to ensure that potential adverse impact has either been avoided or effectively mitigated. Based on experience in the pilot horticulture activities under PSCEDP, two measures should be changed as part of PSCEDPII: Page 24 of 43 • Under PSCEDP orchard owners kept a Blue Book to track production, inputs required etc. The format was difficult for owners to use and in many instances overlapped with requirements by GLOBAL G.A.P. Under PSCEDPII the Blue Book and the GLOBAL G.A.P. tracking tracking requirements should be merged and provided in a format that is more adapted to farmers skills. • Government officials, PMU staff and consultants have visited the pilot farms under PSCEDP activities. Participating orchard owners appeared at times confused to advise that was volunteered, and standards they were required to comply with. Under PSCEDPII a simple communications plan should be developed in collaboration with the future participating farmers to ensure that everyone understands the actual requirements under the project. A separate budget shall be allocated for this communications plan. 11.1 PMU Responsibilities The PMU has the overall responsibility for implementation and monitoring of compliance in the project as the decision-making authority, with oversight of plans and budgets. The PMU will report to and be guided by MTICM and receive technical support from MFLR. The PMU is also the interface with the World Bank. The PMU will engage a full time horticulture manager to carry out most of the day-to- day operations on the orchards. In addition, PMU oversight responsibilities are supported by GLOBAL G.A.P., which ensures production compliance with environmental norms. The PMU may engage local or international consultants to provide expert input. A critical lesson from Phase 1 of the horticulture project was that to achieve commercial success, production and marketing activities require professional management, both with respect to on-farm management and marketing of products. In this regard, it is anticipated that the management of commercial production will be subcontracted to a professional management company with on-farm technical and marketing experience, and have access to an established market network, particularly in export markets. It is anticipated that the management company will have the following responsibilities: • Overall administration of commercial production activities; • Organize farmers into farmers’ association and eventually transfer them into corporate entities; • Establishment of commercial orchards; • Provide on-farm technical and management support; • Training and capacity building of participating farmers; • Provide training and ensure that participating farms are GLOBAL G.A.P. certified; • Conduct all marketing activities to ensure that marketable crops are sold at competitive prices that maximize the income earning potential of participating farmers; • Provide all necessary post-harvest handling support to minimize on and off- farm losses and waste; and • Provide capacity building and training to extension service officers from all relevant government agencies in target areas. 11.2 Orchard Owners Responsibilities Page 25 of 43 Orchard owners will be offered training that ensures their ability to manage large commercial orchards on a day-to-day basis in compliance with the ESMF. The owners have the primary responsibility for oversight of work on the orchards, but will be provided with significant technical support, including from a hands-on horticulture manager. The orchard owners are expected to form a dedicated producer group to promote information sharing among sector participants and represent growers in discussions with ministries and others to develop programs and services that support sector development. In addition, direct beneficiaries under PSCEDPII are required to assist in demonstration and training of future entrants. 11.3 Horticulture Manager’s Responsibilities The horticulture manager in the PMU will provide regular oversight and advise in use of agro-chemicals, water quality and quantities, yields, erosion and labour oversight. The manager is expected to spend the bulk of working hours in the field with hands-on work to support the orchard development. The manager should work directly with the District Agricultural Office (DAO) to provide support to the farmers either directly or through the short-term consultants who provide discrete technical assistance. The horticulture manager specifically should: • Work with relevant government agencies to develop training to build capacity of participating farmers, workers and communities; • Organize farmers into farmers’ association and eventually transfer them into corporate entities; • Provide on-farm technical and management support; • Advise on marketing activities to ensure that marketable crops are sold at competitive prices that maximize the income earning potential of participating farmers; • Provide support for all necessary post-harvest handling support to minimize on and off-farm losses and waste; and • Provide capacity building and training to extension service officers from all relevant government agencies in target areas. In addition, the horticulture manager will provide guidance on association and community engagement to ensure social cohesion. This includes, ensuring that the orchard association members meet regularly and that community engagement takes place at least quarterly. The horticulture manager will undertake no-going engagement with communities to monitor impacts, tension, and the issue of envy when some get extra support and guarantees while others don’t. The horticulture manager will use the reporting framework provided in Appendix 3. 11.4 GLOBAL G.A.P. Responsibilities Subscription to and certification by Global Gab ensures not only compliance with environmental norms, but also potential international export markets. GLOBAL G.A.P. officers provide an extensive inspection of participating farms annually for US$4,800/year. The inspection covers agro-chemical use and residue, storage, labelling, equipment, day-to-day oversight (GLOBAL G.A.P. protocol kept by orchard owners), water use and contamination, crop and tree damage/management. Certification is a Page 26 of 43 larger burden for small orchards, while larger orchards might see the certification as a marginal cost. Certification must be renewed annually. While GLOBAL G.A.P. certification is perhaps costly, it ensures simultaneous compliance with World Bank safeguards and national environmental legislation. Furthermore, it provides access to new technologies and best practice orchard management. 11.5 GoL Responsibilities PMU activities are organized under the MTICM, which provides oversight. MAFS will provide technical support through the participation of and coordination with district agriculture officers. MTEC has the overall responsibility for to enforce environmental regulations and provide testing. MAFS is expected to play an important role in strengthening and expanding the range and quality of extension support services required by farmers to engage in tree crop production. However, as commercial horticulture is new to Lesotho, the project will ensure compliance through private testing by independent labs to monitor chemical residues, soil nutrition and water quality, and partner with government agencies to ensure capacity building. In the medium- to long term, the MAFS will maintain this oversight supported by the MTEC. Longer term, upstream activities are expected to include processing of crops. Lesotho National Development Corporation (LNDC) can assist in attracting investors to the sector. LNDC manages a number of warehouses throughout Lesotho, which may be converted into small pack houses for primary processing, handling and sorting activities. Processing facilities may also be located in the existing warehouses. 11.2 Training and Development A number of capacity building activities are supported under PSCEDPII to ensure sound management of agro-chemials, business acumen and general awareness raising. Given the high level of illiteracy, particularly in rural areas, training must be innovative, hands on and delivered in SeSotho. All training and consultations conducted should mainstream occupational health issues, HIV/AIDS awareness and gender. Some training activities will target orchard owners, while others should engage surrounding communities. Broader engagement and consultation with communities is a proactive measure to ensure community cohesion and buy-in, track benefits and prevent disconent from the outset. Early community engagement may also enable future local development of new orchard associations post-PSCEDPII. The specific training needs will be identified and developed by the horticulture manager with input from orchard owners, GLOBAL G.A.P. agents and the PMU. GoL is expected to support the expansion of qualified and accessible extension services, support improved credit facilities for commercial farming, develop statistics and benchmarking of the horticulture sector and continue to build infrastructure to support rural development (roads, electricity and water access). Page 27 of 43 11.2.1 Training of Orchard Owners and Workers Training to owners and workers should include basic fruit orchard farming techniques, but specifically focus on: i) soil and water conservation; ii) planting and pruning; iii) pest identification and pesticide handing; iii) fertilizer usage; and iv) preventive management (netting, fencing). In addition, orchard owners will receive training in farm management, which will specifically focus on business planning and GLOBAL G.A.P. management. With lack of facilities and weak regulation in Lesotho, it is particularly important that all participants are training in the use and management of pesticides procurement, storage (ventilation, prevention of leaching, stock management etc.), use and understand the potential risks associated with use. The training should be practical in nature in the use of protective gear, understanding of risks to surrounding areas (e.g. drift of spraying). While only some workers might be responsible for agro-chemicals handing, it is essential that all workers have basic knowledge. To develop the orchard owners association the PMU will share standard association rules and provide facilitation in order to develop procedures and rules. It is particularly important to have detailed discussions as the association is established in relation to benefit sharing and establish provisions that are fully accepted by all members to prevent future discontent amongst the members. By receiving the support through the project, the orchard owners commit to participate as a demo demonstration farm for future farm owners interested in orchard development. 11.2.2 Community Training and Consultation The project will engage with community members, not just the community leadership. The engagement may lead to changed procedures and benefit distribution as community members might offer alternative and viable ideas that improves project component. However, at the very least, the engagement with communities should serve as a regular grievance mechamism and provide a forum for sharing basic knowledge on the project. Community training and consultation is expected to be a regular event, headed by the horticulture manager on a quarterly basis. These meetings should ensure: • Broad understanding of benefits offered in the project, including specific benefits provided from PMU; • Understanding of pesticide use and warning systems used. This should include a warning system developed between community members and orchard owners on precautions to be taken during application and accepted notification time lines and/or signals; • Expected outcomes of the project and ability for community members to benefit (whether or not directly through existing activities); • Grievance procedures: whom to contact and what to expect. Page 28 of 43 Appendix 1: Environmental and Social Screening Form for Sub-projects This Environmental and Social Screening Form is designed to assist in evaluation of prospective sub-project activities associated with PSCEDPII. This Form is to be used by reviewers to identify environmental and social impacts. If impacts are identified, the form provides a short description of additional safeguards work required, if any. The reviewer should: Have a solid understanding of environmental and social screening; Obtain baseline information of the proposed area which includes financing, land use changes, use of agricultural inputs and required labour; Provide an outline of proposed project activities; The PMU must keep records of all screening material. Section 1: Environmental and Social Baseline for Project Area The reviewer should provide brief overviews of the baseline information on the following: Geographic location: Description of location; Site map. Land resources: Topography and geology; Soils and soil nutritional baselines, erosion. Water resources: Type of water resources (ground water, surface water); Water quality; Water quantity; Competing uses of water resources. Native habitat: Flora; Fauna; Sensitive habitats. Climate: Temperature; Rainfall; Record of severe weather impacts. Socio-economic baselines: Primary land uses; Main economic activities; Income levels: Children, youth and gender; Health profile. Page 29 of 43 Section 2: Screening framework Table 6: Screening of Subproject Inclusion Will sub-project implementation Response and action to be taken impact/lead to: Yes No National parks Project area will not qualify for inclusion in Follow ESMF project. monitoring guidelines. Areas with rare or endangered Project area will not qualify for inclusion in Follow ESMF flora/fauna project. monitoring guidelines. Significant erosion or top soil Can the erosion be mitigated through project Follow ESMF erosion investments? EMP required. If there is no monitoring effective mitigation, project area will not qualify guidelines. for inclusion in project. Project area is along rivers or EMP required. Follow ESMF significant water sources – within monitoring ground recharge area guidelines. Depletion of water resources Can alternative sources be developed? If not Follow ESMF project area will not qualify for inclusion in monitoring project. guidelines. Historic, archaeological, sacred or Plan for protection of physical cultural resources Follow ESMF cultural heritage sites required in accordance with World Bank OP monitoring 4.11. guidelines. Existing forest cover EMP required. Follow ESMF monitoring guidelines. Contamination of soil Site might be rejected or EMP required. Follow ESMF monitoring guidelines. Loss of soil fertility Site might be rejected or EMP required. Follow ESMF monitoring guidelines. Existence of physical cultural Project area will not qualify for inclusion in Follow ESMF resources as defined under World project. monitoring Bank’s Operational Policy 4.11. guidelines. Loss of land, livelihood or assets Site might be rejected or trigger World Bank’s Follow ESMF policy on Involuntary Resettlement (OP 4.12). monitoring guidelines. Hinder access to land, livelihood or Site might be rejected or trigger World Bank’s Follow ESMF assets policy on Involuntary Resettlement (OP 4.12) monitoring required. guidelines. Page 30 of 43 Appendix 2: Environmental and Social Management Framework Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency 1. Agro- 1.1 Inadequate Training, routine Orchard owner Inspection of GLOBAL G.A.P. Annually Embedded* chemicals storage inspection, suitable storage storage capacity. Horticulture Monthly manager 1.2 Theft Training, suitable storage Orchard owner Inspection GLOBAL G.A.P. Annually Farm watch: LSL53/hr capacity, farm watch. (embedded *) Horticulture Monthly manager 1.3 Out dated or Training, assistance in Orchard owner Inspection of GLOBAL G.A.P. Annually Annual training cost (total): damaged purchasing to ensure storage LSL385,000 per annum** agrichemicals adequate amounts. Horticulture Monthly manager 1.4 Occupational Training (application, Orchard owner Training GLOBAL G.A.P. Annually See 1.3 health handling, cleaning), protective clothing and Horticulture Monthly equipment. manager 1.5 Mis- or Training in dosage and Orchard owner Training GLOBAL G.A.P. Annually See 1.3 overuse application. Horticulture Monthly manager Sampling and chemical Horticulture Tests GLOBAL G.A.P. Annually Part of GLOBAL G.A.P., see 12 analysis of project soil and manager/METC leaf tissues. Horticulture Quarterly manager/MTEC 1.6 Equipment Inspections, financial Horticulture Inspection of GLOBAL G.A.P. Annually Annual replacement of malfunctioning support for annual updates manager equipment equipment: LSL 160,000 per of equipment required for Horticulture Monthly annum safe application manager 1.7 Lack of day- Apply principles required Orchard owner Training GLOBAL G.A.P. Annually See 1.3 to-day oversight for Global GAP certification Page 31 of 43 Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency and on-going audits Horticulture Monthly manager 2. Water 2.1 Alert all users of issue, Horticulture Tests GLOBAL G.A.P. Annually Part of GLOBAL G.A.P., see 12 Contamination of provide alternatives, manager/METC Additional water tests: LSL water resources improve prevention Horticulture Quarterly 6,000/annually measures, seek out clean manager/MTEC up options. 2.2 Depletion of Seek alternative sources, Horticulture Tests GLOBAL G.A.P. Annually Part of GLOBAL G.A.P., see 12 water resources including rainwater manager/ METC Additional tests: LSL harvesting. Horticulture Quarterly 6,000/annually manager/MTEC 3. Yields 3.1 Pest damage Preventive measures, quick Orchard owner Inspection Horticulture Monthly Embedded* response to outbreak. manager 3.2 Inadequate On field training. Orchard owner Inspection Horticulture Monthly See 1.3 thinning and manager pruning 3.3 Weather Hail nets to be installed to Orchard owner Inspection Horticulture Monthly Embedded* damage to trees protect trees. manager and crops Diversity varieties to Orchard owner Inspection Horticulture Monthly Embedded* spread risk. manager Screens, natural or built. Orchard owner Inspection Horticulture Monthly Embedded* manager 4. Erosion 4.1 Depletion of Contouring of land if Orchard owners Horticulture Horticulture Monthly Embedded* soil nutrition, necessary. manager inspect manager erosion and develop mitigation. Ensure appropriate grading Orchard owners Horticulture Horticulture Monthly Embedded* of soil and planting. manager inspect manager and develop mitigation. Built adequate drainage. Orchard owners Horticulture Horticulture Monthly Embedded* manager inspect manager and develop Page 32 of 43 Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency mitigation. 5. 5.1 Poor Quarterly meetings. Horticulture Meeting PMU Quarterly LSL25,000/year/orchard Stakeholders involvement of manager or community consultant stakeholders not directly benefitting from project 5.2 Disruption to Disruption should be fully Horticulture Consultation PMU Once, prior to TBD, avoidable footpaths avoided. If unavoidable, can manager inception of project only happen with full consent of community and mitigating measures. 5.3 Unheard Complaints and sharing of Horticulture Grievance PMU Orchard owners See 5.1 community concerns should be manager mechanism meet monthly complaints and encouraged. May be raised concerns verbally in community Quarterly and/or orchard owner’s community meetings. All potential meetings stakeholders appraised of meetings or notified where more formal comments/ complaints may be submitted. 5.4 Social conflict Awareness of ability to Horticulture Consultations, PMU Quarterly See 5.1 due to increased participate in project manager meeting community disparities in activities, potential project meetings community support to replicate. income 6. Farm 6.1 Orchard Pursue support through Horticulture Business plan PMU Monthly Embedded* finance owners unable to LNDC Partial Credit manager development secure credit Guarantee Fund (project, or (guarantees 50% of private scale up) outstanding debt) and Lesotho Enterprise Page 33 of 43 Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency Assistance Program (LEAP) (training and credit), register as formal business so can be eligible for commercial financing. 7. Knowledge 7.1 Worker turn Enter into long-term Orchard owners On-going Horticulture Monthly Embedded* base over contracts with trained manager labour to retain knowledge. 7.2 Orchard Prepare business Horticulture Monthly visits PMU Monthly Embedded* owner turn over succession plan to ensure manager continued farm oversight. 8. Land 8.1 Insecure land Formalize and ensure long- Orchard owners Inception of Horticulture Inception Embedded* tenure tenure term land lease or sub- project manager lease contracts. 8.2 Inappropriate Ensure that all Orchard owners When additional Horticulture Inception Embedded* land acquisition participating orchard land is being manager owners have provided acquired adequate compensation to land owners, that land transfers are approved by chief. 9. Gender 9.1 Gender Seek equal gender Horticulture Inception of PMU Inception Embedded* inequality distribution of men women manager project in association. Seek equal gender Horticulture Training PMU TBD, when training Embedded* distribution in training manager planning offered activities. Seek equal opportunities Orchard owners Business plan Horticulture Monthly Embedded* for workers. manager Ensure equal opportunities Orchard owners Business plan Horticulture Monthly Embedded* in management roles. manager Sensitize project Horticulture Training PMU During training See 1.3 participants on gender manager Page 34 of 43 Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency parity in training. 10. Labour 10.1 Child labour No mitigating measure, Horticulture Training Labour Inception See 1.3 in project child participation will not manager/ PMU Commissioner be permissible. 10.2 Spread of Training mainstreamed Horticulture Training, percent Labour All training See 1.3 HIV/AIDS into farm curricula and manager w. change in Commissioner events/community meetings. support from infection, local meetings NGOs clinic 10.3 High turn Understand underlying Orchard owners Actual numbers Horticulture Monthly Embedded* over reasons, seek improvement manager in conditions to prevent turn over. 10.4 Minimum Ensure that workers are Orchard owners Updated Labour Annually Embedded* wage paid at least current regulations Commissioner minimum wage. 11. Rural 11.1 Change in To participate in the Horticulture Collect basic PMU Annually Embedded,*Part of World livelihood livelihood for project, orchard owners manager household data: Bank M&E improvement households should provide basic gender, ages, involved information to enable the educational project to track impact. status, health status, additional employment and incomes. 11.2 Un- Monitor orchard owner Horticulture Track income PMU Annually Embedded,*Part of World improved income during project and manager Bank M&E incomes set up monitoring post- project. Monitor number of jobs Horticulture Track income PMU Annually Embedded,*Part of World created and income. manager and jobs created Bank M&E 12. Exports 12.1 Production Business plan development Orchard owners Inspection GLOBAL G.A.P. Annually LSL 6,150 per site (this compliance with and mitigation measures to Horticulture includes the certification Page 35 of 43 Issue Potential Action/mitigation Responsibility Measure Monitoring Monitoring Estimated cost concern measure institution frequency GLOBAL G.A.P. comply with GLOBAL G.A.P. manager Monthly costs and the travel costs for certification. the auditors) annually for each orchard’s GLOBAL G.A.P. certification 12.2 Monitoring Farmers are monitoring PMU Tracking PMU Annually Embedded* accuracy production. This can be cross-checked by using data collected by Lesotho customs authorities and MITM. 13. Project 13.1 Project Prepare comprehensive PMU On going World Bank Annually Embedded* phase out participants programme exit subject to dialogue, unaware of phase orchard owner’s input and planning out, end of adjustment. project 13.2 Government Ensure full awareness of PMU On going World Bank Annually Embedded* unaware of phase phase out of subsidies and dialogue, out, end of transfer to GoL agencies to planning project prevent project failure. Prepare comprehensive transfer throughout project. Note, costs in chart should not be aggregated as the same expense is mentioned more than once, as the cost reflects a total which covers several issues. * Part expenses that orchard owners budget for in the business plan. These expenses may be subsidized by project funds, but phased out over a five-year period. ** Cost is total for a full year, of all training provided to orchard owners and orchard workers. Page 36 of 43 Appendix 3: Horticulture Manager’s Monthly Reporting Framework Year/month covered in report: Name of horticulture manager: Name/location of orchard: Last five visits to orchard (dates): Names of orchard owners, workers or community members consulted during visit: Visit objectives/focus: Agro-chemicals [check if concerns, short description of issue]: Storage � ______________________________________________ Theft prevention � ______________________________________________ Outdated/damaged � ______________________________________________ Occupational health concerns � ______________________________________________ Mis- or over-use � ______________________________________________ Equipment concerns � ______________________________________________ Oversight concerns � ______________________________________________ Mitigation required and agreed with orchard owner(s)[description]: Water [check if concerns, short description of issue]: Contamination � ________________________________________________________ Depletion � ________________________________________________________ Development � ________________________________________________________ Mitigation required and agreed with orchard owner(s)[description]: Page 37 of 43 Yields [check if concerns, short description of issue]: Pests � ____________________________________________________ Thinning/pruning � ____________________________________________________ Weather damage � ____________________________________________________ Mitigation required and agreed with orchard owner(s)[description]: Erosion [check if concerns, short description of issue]: Erosion � _______________________________________________________________ Mitigation required and agreed with orchard owner(s)[description]: Socio-economic issues raised by stakeholders (worker turn-over, pay, financial concerns, community cohesion, land tenure issues, benefit sharing, health) [check if concerns, short description of issue]: Orchard owners � ________________________________________________________ Community � ________________________________________________________ Workers � ________________________________________________________ Gender � ________________________________________________________ Mitigation required and agreed with orchard owner(s)[description]: Horticulture manager’s next steps/plan (e.g. additional training to rectify issues identified, Global Gap, amendments in business plan etc.) Page 38 of 43 Appendix 4: Agro-chemicals Expected in Project The table provides pesticides needed on an annual basis for a 30-hectare orchard. Chemical Quantity Rate of application/10l Safety Target the following water period Spay urea 3*25kg 200g N/A Flower stimulation Zinc-Max 3*25kg 20ml N/A Nutrition Chlorypyriphos 3*25L 8ml N/A Scale Biodew 3*5L 1ml N/A Fusirium & Powdery mildew Flowable sulphur 3*25L 40ml N/A Fusirium & Powdery mildew Dithane/sancozeb 3*25kg 15g 14days Fusirium & Powdery mildew Nimrod 3*5L 6ml 14days Fusirium & Powdery mildew Spraybor 3*25kg 10g N/A Nutrition Azinphos 3*5L 5ml 14 days Codling moth Karate 6*1L 2ml 14 days Bollworm Rubigan 6*1L 2ml 21days Mildew Calcimax 3*25kg 45ml 0 days Bitter pit Mag-Max 3*25kg 30ml 0 days Nutrition Calypso 3*1L 1.5ml 21 days Codling moth MAP 3*25kg 50g 0 days Post-harvest nutrition K-Max 3*25kg 50g 0 days Post-harvest nutrition GF 120 3*25L 500ml 1 day Fruit fly baiting LAN 450*50kg 90g/tree 0 days Nutrition Liming Would depend on the specific soil analysis and recommendations requirements Basal fertilizer Would depend on the specific soil analysis and recommendations Copprox super 3*25kg 40g 0 days Curly leaf Thiram 3*25kg 15g 0 days Curly leaf Merphan/Captonflo 3*5L 10ml 14days Various diseases Endosulfan/thionex 3*6L 10ml 14days Green aphids Indar 3*3L 8ml 1day brown rot Dipel 3*25kg 5g 0 days bollworm Page 39 of 43 Appendix 5: Agro-chemicals Banned in Lesotho There is a total ban on the use of the pesticides included in this table in accordance with environmental legislation. Chemical Relevant CAS Category number(s) 2,4,5- T 93- 76- 5 Pesticide Aldrin 309- 00- 2 Pesticide Binapacryl 485- 31- 4 Pesticide Captafol 2425- 06- 1 Pesticide Chlordane 57- 74- 9 Pesticide Cholordimeform 6164- 98- 3 Pesticide Chlorobenzilate 510- 15- 6 Pesticide DDT 50- 29- 3 Pesticide Dieldrin 60- 57- 1 Pesticide EDB (1,2 dibromoethane) 106- 93- 4 Pesticide Endrin 2385- 85- 5 Pesticide Ethylene dichloride 107- 06- 2 Pesticide Ethylene oxide 75- 21- 8 Pesticide Heptachlor 76- 44- 8 Pesticide Hexachorobenzene 118- 74- 1 Pesticide Mercury compounds 99- 99- 9 Pesticide Mirex 72- 20- 8 Pesticide Monocrotophos 6923- 22- 4 Pesticide Methmidophos (soluble liquid formulations of the substance that 10265- 92- 6 Pesticide exceed 600g active ingredient/l) formulation Methyl-parathion (emulsifiable concentrates with 19.5%, 40%, 50%, 298- 00- 0 Pesticide 60% active ingredients and dusts containing 1,5%, 2% and 3% active formulation ingredient) Monocrotophus (soluble liquid formulations of the substance that 6923- 22- 4 Pesticide exceed 600g active ingredient/l) formulation Phosphamidon (soluble liquid formulations of the substance that 13171- 21- 6 Pesticide exceed 1000g active ingredient/l) formulation Dustable powder formuations containing a combination of Benomyl 178- 35- 2 Pesticide at or above 7%, Cardofuran at or above 10% and Thiram at or above 1563- 66- 2 formulation 15% 137- 26- 8 Crocodolite 12001- 28- 4 Pesticide Source: Government of Lesotho: Environment Act 2008. Page 40 of 43 Appendix 6: Stakeholder Consultation and Contribution for ESMF Title Name Orchard manager in Mahobong Mr. Ts’epang Auda Pilot orchard in Thuathe Mr. Blessing Nkhasi Pilot orchard in Qoqolosing Mr. PhihlelaMotebang Part owner of Likhotola Fruit Farm Produce Company, Mrs. Makhethang Liphoto Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mr. Makhobalo Mohosho Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mrs.Maprince Phothane Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mr. Libako Mohapi Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mr. Maletsema Ncholo Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mrs. Mathaba Pasa Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mr. Joang Khethisa Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mr. Katleho Roelane Mahobong farmers association Part owner of Likhotola Fruit Farm Produce Company, Mrs. Malekena Mohosho Mahobong farmers association DG, Lesotho Land Administration Authority Mr. Mahashe Chaka Former DG, Lesotho Land Administration Authority Mr. Sean G. Johnson Director of Lease Services, Lesotho Land Administration Mr. Mosae Letele Authority International horticulture advisor Mr. Yasou Konishi Horticulture advisor Dr. Thabiso Lebese PSCEP Project Manager Mr. Chaba Mokuku PSCEP Administrative Secretary/Acting Procurement Manager Ms. Mats’eliso Mokete Key stakeholder issues reflected in ESMF design: On farm communication Given the many actors involved in the PSCEDPI horticulture pilot, orchard owners at times appeared confused regarding advise vs. absolute requirements to be followed. Actors include project consultants, PMU staff, GoL employees and the horticulture manager. Under PSCEDPII it is important to clarify communication to orchard owners to ensure that there is understanding of roles of different actors. When doubts arise, the orchard owners should be advised to consult with the horticulture manager. While the PMU cannot be expected to control all communication between actors and orchard owners, the PMU could work to prevent any possible misunderstandings by providing guidance to good project communication, including clear introduction of actors, their role and purpose in the project. Reporting procedures Under PSCEDPI, the pilot farmers were required to submit two different reports: a blue book that was overseen by the horticulture manager and a GLOBAL G.A.P book. Stakeholders considered this reporting somewhat excessive, with overlaps and inadequate formatting for reporting. As part of the ESMF, the reporting requirements will be reworked to merge the reporting formats while still ensuring adequate tracking of growth, use of agro-chemicals and production. Thus, the reporting should still cover Page 41 of 43 all issues tracked under PSCEDPI, but develop an adequate format that fulfils requirements of certification and streamlines requirements. Robust Communications Strategy During the very initial phase of PSCEDPI, some of the participating pilot farmers experienced tension with surrounding communities. Such tensions were likely rooted in the rural conditions where few opportunities are available and hardships are felt by most. While tensions have subsided through engagement, the ESMF provides for a more substantial budget to engage with surrounding communities, including quarterly community meetings and ability for all community members to reach the horticulture manager directly with any grievances. Land issues Some pilot farmers under PSCEDPI were considering entering short-term leases with neighbouring farmers in order to expand orchards. While the PMU has no direct say in activities that are no longer supported with project funds, it is advisable that project participants are aware of potential pit-falls in entering in unsecure and short term sub- lease contracts given the production cycle in horticulture. Additionally, it may be of concern that compensation in such sub-lease contracts either puts the lessee at risk due to high cost or compensates the leaser inadequately which may result in future land related conflicts. Such concerns are addressed in the ESMF and land tenure issues should be part of the horticulture business training. Lesotho Land Administration Authority was consulted during the preparation of the ESMF to discuss ways to formalize rural land tenure under the project, which will be a first in Lesotho under PSCEDPII. Project phase-out PSCEDPI received extension of support for the horticulture component. The extension supported the pilot farmers and was important to ensure commercial viability of production. However, consultation with farmers suggested need for a longer phase out of project support given the expansion of horticulture activities under PSCEDPII. The ESMF therefore provides for a comprehensive phase out program that prepares participants for end of project support. The phase out should be prepared in consultation with the project participants for best results. Page 42 of 43 Appendix 7: Lesotho Map Page 43 of 43